Portillo’s announced Wednesday that it’s lowering development and sales expectations for 2025 amid sluggish traffic and some new stores performing below expectations.
The fast casual is now scheduled to open eight restaurants this year instead of 12. Same-store sales are projected to decline 1 to 1.5 percent, versus prior guidance of 1 to 3 percent growth. Additionally, the brand had targeted 10 to 12 percent revenue expansion for 2025, but that’s been lowered to 5 to 7 percent, and restaurant-level adjusted EBITDA margin expectations changed from 22.5 to 23 percent to 21 to 21.5 percent.
The chain expects comps to be negative 2 to 2.5 percent in the third quarter after seeing a 0.7 percent lift in Q2, including a 1.4 percent drop in transactions. Portillo’s said the guidance changes “reflect an anticipated decline of current trends for the remainder of 2025 given pricing and promotional dynamics within the industry.”
Moving forward, Portillo’s wants to focus on fueling transactions, simplifying operations—meaning the discontinuation of the breakfast pilot—driving a more measured pace of restaurant growth, and positioning for positive free cash flow in 2026.
“As we advance Portillo’s growth strategy, two priorities stand out,” CEO Michael Osanloo said in a statement. “First, driving sustainable traffic through consistent service and value. And second, disciplined development with restaurants designed for strong unit economics, attractive four-wall returns, and efficient capital deployment that will fuel long-term growth.”
The development reset comes a month after Portillo’s revealed its stores in Dallas and Houston have gotten off to a slower start and are pressuring top line revenue performance. Osanloo blamed it on mistakes the brand made around its first Texas-based unit in The Colony. After putting so much into pre-marketing the restaurant and overwhelming staff, the fast casual decided to decrease marketing efforts with future openings, which caused newer outlets to suffer. Portillo’s responded with sustained efforts to boost awareness and local field marketers to lead grassroots efforts.
Another eight units are projected to open in 2026, including the brand’s first airport location in Dallas-Fort Worth International Airport. Portillo’s said the net build cost average for these units is less than $5 million.
The chain’s long-term financial targets include mid-teens revenue growth. Osanloo indicated during Portillo’s Q2 earnings call that the chain could very well return to that mark in 2026.
“We remain confident on mid-teens revenue growth,” Osanloo said at the time. “We have built some great restaurants in Texas, and they’ve just started off slow. And we haven’t given up on them. We think that there’s a lot of potential there. We’re seeing some momentum. We’ve done, I think, a lot of the foundational work to make sure that Texas continues to grow and evolve. We’ve got field marketers in both places. We have active marketing campaigns. We’re building a loyalty database, and we’ll keep using the loyalty database. So mid-teens growth is very reasonable to target for us for ’26.
Portillo’s finished Q2 with 94 restaurants. AUV was $8.7 million for the two quarters ended June 29, down from $9 million.
